Friday stocks waver as GDP grows 2 percent in 3Q

Dow at 11,123, up nine points this morning.

NEW YORK (AP) — Stock wavered Friday after a report on economic growth did little to reassure investors about the health of the economy.
The Dow Jones industrial average fell about 20 points in midday trading.
Gross domestic product, the broadest measure of the nation’s economy, grew at a 2 percent annual pace in the third quarter. That was in line with economists’ expectations and only slightly better than the 1.7 percent growth rate during the second quarter.
Signs of meager growth come as investors grow more cautious heading into next week’s midterm elections and are uncertain about the size of economic stimulus measures the Federal Reserve is expected to announce next week.
Normally such slow GDP growth would have driven stocks much lower. But signs of weak economic expansion provide further support for the Fed’s anticipated stimulus plan.
“Because GDP was so lackluster, we don’t see the Fed pumping the brakes” on its plan, said Tony Zabiegala, a partner at Strategic Wealth Partners.
Stocks rose sharply during the first half of October as expectations mounted that the Fed would start buying Treasury bonds to drive interest rates lower. That, in turn, is supposed to spark spending and lending. In recent days, however, the size of the bond-buying program has been questioned, putting a market rally on hold.
John Apruzzese, a partner and portfolio manager at Evercore Wealth Management, said reaction in anticipation in the program is typical of the market.

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